EU Chief Calls on Apple CEO Tim Cook to Open Hardware and Software Ecosystem

[mrochester]

Why is that what we actually need? As I have tried to make clear, the EU can use regulations to create more competitive markets when there are large dominant players that are abusing their position. The EU cannot create new players in a market by fiat declaration, no one can. The EU can only lower barriers caused by bad corporate behaviour they cannot lower barriers that amount to things like "time has passed".

Another thing that isn't clear is why you want more OS players, the argument you're making seems to be that if we had more OS choice then the App Store lock in and abuse would be just fine and nothing to worry about. However there is nothing to say that the market couldn't end up just being iOS - 40% Android - 40% then a bunch of companies with 5% each, then App Store lock in and abuse would be just as big of a problem as it is today.

because developers are complaining that they have to pay a commission to Google and Apple and they have to do that because Google and Apple have a duopoly in the mobile os market. If consumers were spread amongst a greater number of OSes then developers could more easily choose to ignore Android and iOS and just make their app compatable with whatever other OSes are out there, which in turn puts competitive pressure on Google and Apple to do more to woo those developers.

as it stands, the DMA will not do anything to loosen Google and apples duopoly on either the OS market or the App Store market. We need more OSes to achieve that.

 

[bcortens]

because developers are complaining that they have to pay a commission to Google and Apple and they have to do that because Google and Apple have a duopoly in the mobile os market. If consumers were spread amongst a greater number of OSes then developers could more easily choose to ignore Android and iOS and just make their app compatable with whatever other OSes are out there, which in turn puts competitive pressure on Google and Apple to do more to woo those developers.

as it stands, the DMA will not do anything to loosen Google and apples duopoly on either the OS market or the App Store market. We need more OSes to achieve that.

For a single example of how the DMA will loosen the duopoly of the App Store market. The DMA frees app developers to compete directly with Apple's system apps (such as Safari) without having Apple deny them the opportunity to market their apps to customers for arbitrary reasons.

Next. Adding more OS competition does not guarantee that the duopoly could be broken. There was a time when Microsoft and Amazon both had mobile OSs and yet both failed because 5% market share in the mobile OS space wasn't enough to sustain them...

Suppose they were sustainable though, if each had only 5% that doesn't mean that Apple and Google wouldn't still be operating a duopoly with 45% share each...

Or suppose we had 4 players each with 25%, if each of those four players acted like Apple and Google do with their App Stores we would still have the same problem. Dominant players preventing developers from competing fairly with the platform vendor.

 

[bcortens]

I am optimistic that things like Springtomize will become possible without a Jailbreak under the new DMA... it would be nice to have alternative window managers on iPadOS (rather than StageManager).

 

[mrochester]

For a single example of how the DMA will loosen the duopoly of the App Store market. The DMA frees app developers to compete directly with Apple's system apps (such as Safari) without having Apple deny them the opportunity to market their apps to customers for arbitrary reasons.

Next. Adding more OS competition does not guarantee that the duopoly could be broken. There was a time when Microsoft and Amazon both had mobile OSs and yet both failed because 5% market share in the mobile OS space wasn't enough to sustain them...

Suppose they were sustainable though, if each had only 5% that doesn't mean that Apple and Google wouldn't still be operating a duopoly with 45% share each...

Or suppose we had 4 players each with 25%, if each of those four players acted like Apple and Google do with their App Stores we would still have the same problem. Dominant players preventing developers from competing fairly with the platform vendor.

There are already browsers that compete with safari, nothing will change here. There are already texting apps that compete with iMessage and email apps that compete with mail.

Apps will still pay the same money to Apple (whether that be an externally invoiced commission for payments taken outside the App Store, the normal commission route or higher up-front development costs etc) so they won’t be financially better off either

 

[bcortens]

There are already browsers that compete with safari, nothing will change here. There are already texting apps that compete with iMessage and email apps that compete with mail.

Apps will still pay the same money to Apple (whether that be an externally invoiced commission for payments taken outside the App Store, the normal commission route or higher up-front development costs etc) so they won’t be financially better off either

Browsers cannot use their own rendering engines and as such cannot meaningfully differentiate themselves in performance or capability.
Messaging apps are required to be interoperable to allow movement between messaging platforms without having to force your family and friends to migrate with you.
These are meaningful changes.

Apple is unlikely to be able to extort the same fees. If they are I think the EU should regulate them again to prevent that behaviour (or force Apple to share iPhone hardware revenue with the developers that make its platform viable).

Edit: I don't think Apple will be able to force side loaded apps from paying them something, if they do try and force side loaded apps to pay them they are likely to run into anti-circumvention measures of the law and may end up dragged before the EU again and get even more regulation. They risk the EU saying something like the companies aren't allowed to do any enforcement at all. The more Apple fights this the more regulation they invite.

 

[mrochester]

Browsers cannot use their own rendering engines and as such cannot meaningfully differentiate themselves in performance or capability.
Messaging apps are required to be interoperable to allow movement between messaging platforms without having to force your family and friends to migrate with you.
These are meaningful changes.

Apple is unlikely to be able to extort the same fees. If they are I think the EU should regulate them again to prevent that behaviour (or force Apple to share iPhone hardware revenue with the developers that make its platform viable).

iMessage isn’t a gatekeeper, only WhatsApp and Facebook messenger are, so nothing will change with iMessage.

A different rendering engine isn’t a competitive difference between browsers.

It’s not about extorting fees, it’s about charging for the value Apple creates for developers. Developers can’t expect to get that for nothing.

 

[bcortens]

iMessage isn’t a gatekeeper, only WhatsApp and Facebook messenger are, so nothing will change with iMessage.

A different rendering engine isn’t a competitive difference between browsers.

It’s not about extorting fees, it’s about charging for the value Apple creates for developers. Developers can’t expect to get that for nothing.

Yes a different engine is a competitive difference. Do you never come across sites that render perfectly well on Chrome but suck in Safari?

Then Apple should pay developers a share of all iPhone revenue because the iPhone would be radically less popular without third party apps.

 

[mrochester]

Yes a different engine is a competitive difference. Do you never come across sites that render perfectly well on Chrome but suck in Safari?

Then Apple should pay developers a share of all iPhone revenue because the iPhone would be radically less popular without third party apps.

I dont use chrome.

If a site doesn’t render properly it’s a web developer issue not a browser issue.

Don’t forget that developers need Apple more than Apple needs developers. The relationship means Apple has the upper hand when it comes to setting prices.

 

[bcortens]

I dont use chrome.

If a site doesn’t render properly it’s a web developer issue not a browser issue.

Don’t forget that developers need Apple more than Apple needs developers. The relationship means Apple has the upper hand when it comes to setting prices.

I don't use chrome much, but sometimes there is a site that only works on chrome. Yes it is a web developer issue but you know what? Sometimes you still need to use that site...

Take away all 3rd party apps (and games) and then ask Apple to compete with Android - it wouldn't be pretty.
Yes Apple has the upper hand, but they are abusing it. Having the upper hand doesn't change the fact that the iPhone would be less popular without third party apps. Thus Apple is gaining increased iPhone sales thanks to the existence if 3rd party apps. Thus those third party developers should be compensated (based on the same logic used by Apple and yourself to justify Apple's fees).

Edited for clarity.

 

[mrochester]

I don't use chrome much, but sometimes there is a site that only works on chrome. Yes it is a web developer issue but you know what? Sometimes you still need to use that site...

Take away all 3rd party apps (and games) and then ask Apple to compete with Android - it wouldn't be pretty.
Yes Apple has the upper hand, but they are abusing it, that doesn't change the fact that the iPhone would be less popular without third party apps and thus Apple is gaining increased iPhone sales thanks to the existence if 3rd party apps. Thus those third party developers should be compensated (based on the same logic used by Apple and yourself to justify Apple's fees).

They are compensated, they make gob loads of money from Apple customers.

 

[bcortens]

They are compensated, they make gob loads of money from Apple customers.

Again, my logic is standing, if Apple can charge a commission of 3rd party developers why can't the developers charge a commission from Apple for helping Apple make gobs of money?

 

[mrochester]

Again, my logic is standing, if Apple can charge a commission of 3rd party developers why can't the developers charge a commission from Apple for helping Apple make gobs of money?

They could certainly try. Not entirely sure Apple would take them up on the offer though as I doubt Apple sees much value in that agreement.

 

[bcortens]

They could certainly try.

Except as you mention Apple has power over them making it impossible to negotiate from a position of equality.

However this isn't my point, the point is that Apple benefits from developers just as much as they benefit from Apple. Apple could not sell nearly as many iPhones if there were no third party apps and games. As such, if Apple is entitled to a chunk of developer revenue because they provided the platform, then logically, because third party apps and games increase the number of iPhone sold then the third party developers are entitled to a portion of Apple's iPhone revenue.

I know realistically this is impossible because developers have no power relative to apple (and the possibility of developers all getting together for collective bargaining and agreeing to pull their apps for a month or something is nil).

So we need regulation to control Apple's excesses.

 

[mrochester]

Except as you mention Apple has power over them making it impossible to negotiate from a position of equality.

However this isn't my point, the point is that Apple benefits from developers just as much as they benefit from Apple. Apple could not sell nearly as many iPhones if there were no third party apps and games. As such, if Apple is entitled to a chunk of developer revenue because they provided the platform, then logically, because third party apps and games increase the number of iPhone sold then the third party developers are entitled to a portion of Apple's iPhone revenue.

I know realistically this is impossible because developers have no power relative to apple (and the possibility of developers all getting together for collective bargaining and agreeing to pull their apps for a month or something is nil).

So we need regulation to control Apple's excesses.

Developers are customers of Apple, they aren’t supposed to be negotiating from a position of equity. Apple has the customers, developers have the money. They both exchange some value.

the DMA has nothing to do with Apple’s fees, they’ll still be charged (the EU realises they can’t dictate how much Apple sells its services for).

 

[bcortens]

Developers are customers of Apple, they aren’t supposed to be negotiating from a position of equity. Apple has the customers, developers have the money. They both exchange some value.

the DMA has nothing to do with Apple’s fees, they’ll still be charged (the EU realises they can’t dictate how much Apple sells its services for).

The DMA seems to attempt to limit Apple's ability to charge developers fees outside of its App Store (the anti-circumvention language). Apple wants a percent of revenue for all activity that occurs on its platform and I would argue that this should not be legal, it is rent seeking in a nearly pure form. Before the iPhone Apple did not get a cut of revenue from macOS but they still built create APIs, why? Because it is to Apple's benefit to make sure their platform is a great App target. Apps are so vital to macOS that Apple got Microsoft to commit to Office for the Mac in an important deal in 1997 when Jobs returned. This of course helped Microsoft with anti-trust concerns but it was also vital to getting Mac OS X off the ground! Native Mac OS X support from important apps was constantly discussed throughout the early years of the 2000s. The idea that it is a one way street and that developers should be grateful Apple lets them keep a share of the revenue at all is ludicrous and demonstrates an ignorance of history. We should all know how important third party apps are to a thriving platform, after all app support is one of the primary reasons why Blackberry OS, FireOS (or whatever it was called) and Windows Phone failed, not enough key apps stuck around.

Next, the existence of the exceptions and special deals for important big companies (Netflix, Disney, and Amazon) demonstrates that this is all about money for Apple. They know they can't lose those big companies so they give them "reader" exemptions. If it was about paying for API access, as you contend these exemptions wouldn't exist. They don't need thee money to keep building out the APIs they already make enough from selling iPhones for that. They want the money to keep propping up their services revenue, it's rent seeking, plain and simple.

Unless Apple charges all companies equally (percentage wise), they have not a single leg to stand on to try and extract revenue (beyond the annual developer fees) from anyone who wants to sell their apps outside of the App Store.

 

[webkit]

I’ve never heard of a Fortune 500 country without one single regulatory issue, it’s the nature of the beast. It’s not all or nothing. Sure and since were in the team of hypotheticals apple may win these hypothetical lawsuits or it may lose.

I was responding to your comment that, "Thus far there are no overall regulatory issues."

 

[webkit]

There are already browsers that compete with safari, nothing will change here. There are already texting apps that compete with iMessage and email apps that compete with mail.

However, there are no browser engines that compete with WebKit on iOS because of Apple's restrictions on alternative browser engines. There are no app stores that compete with the App Store on iOS because of Apple's restrictions on alternative app stores and sideloading.

Don’t forget that developers need Apple more than Apple needs developers. The relationship means Apple has the upper hand when it comes to setting prices.

On an individual basis that is true and it's because of Apple's "dominance" in the mobile OS market. Hence why there can be a desire/need for regulations so that one company can't have too much control in a particular market.

 

[mrochester]

The DMA seems to attempt to limit Apple's ability to charge developers fees outside of its App Store (the anti-circumvention language). Apple wants a percent of revenue for all activity that occurs on its platform and I would argue that this should not be legal, it is rent seeking in a nearly pure form. Before the iPhone Apple did not get a cut of revenue from macOS but they still built create APIs, why? Because it is to Apple's benefit to make sure their platform is a great App target. Apps are so vital to macOS that Apple got Microsoft to commit to Office for the Mac in an important deal in 1997 when Jobs returned. This of course helped Microsoft with anti-trust concerns but it was also vital to getting Mac OS X off the ground! Native Mac OS X support from important apps was constantly discussed throughout the early years of the 2000s. The idea that it is a one way street and that developers should be grateful Apple lets them keep a share of the revenue at all is ludicrous and demonstrates an ignorance of history. We should all know how important third party apps are to a thriving platform, after all app support is one of the primary reasons why Blackberry OS, FireOS (or whatever it was called) and Windows Phone failed, not enough key apps stuck around.

Next, the existence of the exceptions and special deals for important big companies (Netflix, Disney, and Amazon) demonstrates that this is all about money for Apple. They know they can't lose those big companies so they give them "reader" exemptions. If it was about paying for API access, as you contend these exemptions wouldn't exist. They don't need thee money to keep building out the APIs they already make enough from selling iPhones for that. They want the money to keep propping up their services revenue, it's rent seeking, plain and simple.

Unless Apple charges all companies equally (percentage wise), they have not a single leg to stand on to try and extract revenue (beyond the annual developer fees) from anyone who wants to sell their apps outside of the App Store.

I can see the annual developer fee going up a lot for those selling outside the App Store then.

 

[BaldiMac]

I don't understand why people keep beating the "force more competition" drum. Competition already exists in the OS market and the market decided that it could only support two major OS. Competition already exists in the app store market on Android and the market decided that it could only support one major app store. Repeating that will yield the same results. Anything else is government choosing new winners, not competition.

What's the most likely outcome of allowing third-party app stores on iOS? Google Play will grow it's share and we will have less competition.

What's the most likely outcome of allowing third-party web browser engines on iOS? Google Chrome will grow it's share and we will have less competition.

Instead of regulations that will have little real world impact on competition, the EU should incentivize European businesses to fork android and make an operating system that competes using their ideals. And end Google's anticompetive agreements with its competitors to include Google Play Services on almost all Android devices.

 

[I7guy]

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[…]

On an individual basis that is true and it's because of Apple's "dominance" in the mobile OS market. Hence why there can be a desire/need for regulations so that one company can't have too much control in a particular market.

apple doesn’t have dominance in any market except the profits market. Obviously baseline regulations are needed in society. But the people have chosen in the market called portable communication and smart devices, and where it’s a consumer choice as opposed to some natural or other barrier or health and safety or financial, government intervention is not needed and not wanted.

 

[webkit]

apple doesn’t have dominance in any market except the profits market. Obviously baseline regulations are needed in society. But the people have chosen in the market called portable communication and smart devices, and where it’s a consumer choice as opposed to some natural or other barrier or health and safety or financial, government intervention is not needed and not wanted.

Apple has a dominant position in mobile OS as part of a duopoly with Google's Android. Having a dominant position because people chose that product does not give a company a right (whether it be Apple or Google in this case) to engage in "anticompetitive behavior" to increase or maintain dominance, use dominance to restrict competition in other markets, etc. It's the dominance combined with anticompetitive behavior, as defined by each country/region, that can create regulatory issues.

 

[I7guy]

Apple has a dominant position in mobile OS as part of a duopoly with Google's Android. Having a dominant position because people chose that product does not give a company a right (whether it be Apple or Google in this case) to engage in "anticompetitive behavior" to increase or maintain dominance, use dominance to restrict competition in other markets, etc. It's the dominance combined with anticompetitive behavior, as defined by each country/region, that can create regulatory issues.

For sure apple has popular models like the iPhone XR, but there are over a thousand cel phone manufacturers making apple a bit player in the smartphone cell phone space.

a certain amount of regulation is needed and good for society but apple is entitled to control its assets and business model. And indeed in the US they are doing exactly that.

The EU had to thread the needle to ensare apple in some regulations that ultimately will be a lose-lose all around imo.

 

[Mrkevinfinnerty]

For sure apple has popular models like the iPhone XR, but there are over a thousand cel phone manufacturers making apple a bit player in the smartphone cell phone space.

a certain amount of regulation is needed and good for society but apple is entitled to control its assets and business model. And indeed in the US they are doing exactly that.

The EU had to thread the needle to ensare apple in some regulations that ultimately will be a lose-lose all around imo.

Bit player with 30% marketshare globally. Nice try.

 

[I7guy]

Bit player with 30% marketshare globally. Nice try.

That’s not by manufacturer. Samsung 20%, apple 16%, xiaomi 12.5% q2/2023.

 

[bcortens]

I don't understand why people keep beating the "force more competition" drum. Competition already exists in the OS market and the market decided that it could only support two major OS. Competition already exists in the app store market on Android and the market decided that it could only support one major app store. Repeating that will yield the same results. Anything else is government choosing new winners, not competition.

What's the most likely outcome of allowing third-party app stores on iOS? Google Play will grow it's share and we will have less competition.

What's the most likely outcome of allowing third-party web browser engines on iOS? Google Chrome will grow it's share and we will have less competition.

Instead of regulations that will have little real world impact on competition, the EU should incentivize European businesses to fork android and make an operating system that competes using their ideals. And end Google's anticompetive agreements with its competitors to include Google Play Services on almost all Android devices.

Competition does not exist in the OS market, you cannot get iOS on Samsung phones and you cannot get Android on iPhones. This is because the phones and the OS are tied together - these regulations are aimed at reducing the power of gatekeepers. The goal is to make it easier to compete with Apple's own apps and to release apps on iOS that Apple would refuse to allow on the App Store (replacements for Springboard come to mind). If Apple's built in App Store starts loosing out to Google Play then they obviously built a worse App Store and they deserve to lose out. I however doubt Google will put much effort into an App Store for iOS, I am more expectant of something like Epic Store or Valve Steam to launch stores on the platform.

The Chrome competition issue is one I somewhat agree with, however, I am not sure how its power can be broken with regulation.

The goal of the EU is not to subsidize the creation of new companies but to level the playing field and prevent market abuse. Since both Apple and Google are abusing their position they deserve regulations. The idea that they will subsidize a new OS is ridiculous and ignores the reality of the difficulties of launching a new OS as I've described in previous posts.